Free trade requires labour norms and democratic control

22.03.2016

Rules are needed for global trade, but they must include high labour norms and guarantee benefits for all, instead of weakening democratic control and favouring multinational corporations.

Free trade is not an easy issue for trade unionists. We have different opinions in our global family. Unions in countries that depend on exports, such as the Nordic countries and Japan, are in favour of free trade, albeit with conditions. Others like the North Americans say they have lost one million jobs because of the North American Free Trade Agreement (NAFTA).

In December 2014, IndustriALL Global Union’s Executive Committee agreed on a set of principles for the negotiations on trade agreements such as the Trans-Pacific Partnership (TPP), the EU-US Transatlantic Trade and Investment Partnership (TTIP) and the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada:

  • Guarantee transparency and democratic legitimacy
  • Include social, employment and workers’ interests
  • Recognize and promote ILO Conventions on workers’ rights
  • Trade agreements are no replacement for an active industrial and investment policy
  • Trade agreements are not an instrument for deregulation
  • We are against the investor protection mechanism ISDS - it is no replacement for democratic legislation
  • No need for deregulation of services
  • Intellectual property rights: we need to keep the right balance between consumer, worker and producer interests
  • Fair trade should be a tool for social progress for all, not for profits for a few

Unfortunately the TPP reached in October 2015 by 12 Pacific Rim countries after years of secretive negotiations, fell short of our demands. After a call by IndustriALL’s Executive Committee in December, a number of affiliates launched new action to stop the ratification of the trade agreement by the parliaments of the signatory countries.

One of the most controversial provisions in the TPP is the investor-state dispute settlement (ISDS) mechanism. It gives multinational corporations the possibility to seek billion-dollar damages from member states in private legal panels if they feel that laws or policies affect their profitability.

Such provisions have been used to attack public health measures, environmental and financial regulations, and employment and health and safety laws. Canada remains the most-sued country by foreign investors. At the moment US companies are seeking for a total of US$6 billion in damages from the Canadian government.

We cannot accept undermining democratic control and national sovereignty in keeping up high labour, social and environmental standards.

After considerable pressure from unions and civil society organizations, the European Commission made the TTIP negotiation procedure more transparent, launched consultations, and published a proposal on an investment court instead of the ISDS. However, European and US union leaders agree that such a court is unnecessary. Instead, TTIP needs to contain broad and enforceable protections for labour rights, public services, and the environment.

Free trade should be fair and create a level playing field for investment and development, in mutually equal and reasonable conditions for fair competition. Therefore fundamental labour rights such as freedom of association need to be an essential part of any trade agreement.  

Jyrki Raina

General Secretary